This state of constant happiness has entered the business world, where employees are expected to constantly be successful and fill their day with new wins.

This isn’t always the case.

Sometimes we fail.

Sometimes we lose.

How a company, or even a department, reacts to failure says more about its culture than how it performs during successful time. Furthermore, admitting and embracing failure, instead of sweeping it under the rug, can help teams in the long run.

Here’s why failure is a crucial to your team’s growth and how you can make the most of it.

Accepting Failure Improves Employee Morale

As a manager, one of the worst things you can do is make failure seem like something that’s completely unacceptable within the company. Nobody is perfect, and pressuring your staff to hit impossible goals will only break them.

“De-emphasizing perfection will encourage your employees to work hard, and grow loyal to your company,” says Amy Errett, CEO and co-founder of Madison Reed. “We would all like our employees to be perfect, but everyone is susceptible to making mistakes — even the best employees. Too much criticism can discourage employees, and create an adversarial atmosphere.”

Furthermore, setting impossible standards creates a new problem within your team: apathy. If they know going in that there’s no way to accomplish their goals, they might not bother to try their best.

“The worst thing about starting a project is having employees being apathetic towards it,” writes the team at Capri Consulting.

“If you have employees on the project who are not motivated and do not pose any interest, the project is already doomed. Employees LOVE validation. If they see that you realize they are a valuable asset to the organisation, their motivations for projects will increase as well as their drive to succeed.”

As more companies acknowledge the benefits of failure, they’re encouraging employees to take risks. This has actually become a popular question within job interviews.

“Hiring managers don’t expect you to be perfect. They know that everybody fails,” says Pamela Skillings, co-founder of Big Interview. “They ask this question to understand: Are you someone who can learn from failure? Are you self-aware enough to acknowledge failure and weakness? Do you take smart risks? After all, if you’ve never failed, then you’ve probably never succeeded on any significant level either.”

Managers would rather have a team that’s passionate enough to take risks than apathetic toward the project or too timid to try. The easiest way to do that is to create a safe zone for failure that is reviewed and at times rewarded.

Admitting Failure Gives Your Team Time to Process

Often, creating a “culture of failure” is easier said than done, especially in established enterprises that already have a set hierarchy.

“Large hiring bonuses are given to executives who often also receive huge parachute payouts when their failures or disappointing performance get them fired,” says Jeffrey Cufaude of Idea Architects. “When the worst thing that can happen is you get fired and walk out the door with a six or seven-figure check, it is indeed very OK to fail.”

Meanwhile, lower-level employees worry about how failing will reflect their job reviews, advancement potential and even salaries. There’s more to lose for them, which means they’re less likely to take risks.

“Before telling everyone that it’s OK to fail, at minimum spend more time (1) thinking about how this advice/request sounds to those possessing less privilege within the organization and perhaps framing your message differently, and (2) ensuring that the organization’s key systems (performance reviews, compensation, et al) are aligned with the acceptance of failure you envision,” Cufaude advises.

Failure isn’t always about risk-taking. There are times when everyone does their part to complete a goal that doesn’t pan out. Once this happens, team members need time to process the loss, and in some cases grieve.

“Failure can take a hefty emotional toll, and that’s OK,” Patrick Allen at Lifehacker writes. “What’s important is getting the negative feelings you have out of your system so you can regroup and tackle what’s next. Failure can leave an open wound, and it’s unwise to ignore it. Without acknowledging it, your wound will continue to hurt, take longer to heal, and possibly get infected.”

On a managerial level, this means evaluating the morale of your team and understanding the effects of the setback.

“It’s OK to let everyone wallow in disappointment and negative feelings for a little while,” explains Amy Gallo, contributing editor at Harvard Business Review. She tells a story about Susan David, founder of the Harvard/McLean Institute of Coaching, losing a client on a Friday that her company had been trying to land for months.

“Although she was trying to be motivating and forward-focused, to her devastated team, she came off as uncaring and uncommitted. In fact, negative or neutral emotions are conducive to deductive reasoning, which means they can help your team more effectively process and analyze the failure. When you acknowledge the disappointment … you’re not just stroking people’s emotions. You’re facilitating a critical appraisal of the situation.”

Instead of brushing failure under the rug or immediately looking for lessons and advice, give your team some time to let the news sink in, and then find ways to grow from it.

Project Reviews Teach You About the Business and Employees

The Butterfly Effect — the idea that a butterfly flaps its wings in one part of the world and causes a tsunami in the next — also applies to business. A small setback for one project can have massive effects on others or on future performance.

“As an entrepreneur I try to look at every mistake as a lesson,” says Shahrzad Rafati, founder and CEO of BroadbandTV. “I want to understand why the mistake was made and how I can avoid making the same one in the future. More importantly, I want to understand how that mistake has changed or affected my business. Whether it’s a significant error in judgment or a minor oversight, I try to find value in the outcome.”

One of the fastest ways to identify mistakes and solve them is to assign a dollar value to them. However, you can also assign value in the form of lost time and employee stress.

Evaluating project performance extends beyond failure. Many successful calls and events happen through sheer luck, which can’t be counted on in the future.

“People are naturally wired to recognize when things aren’t going well, and to focus intently on how to fix problems,” says Elise Keith, co-founder at Lucid Meetings. “This leads us to take our successes for granted, assuming that things went well because we did a great job.

“An enormous part of what helps one project work where another doesn’t is luck — and we take it for granted. Instead, we should be looking for ways to learn from our lucky breaks and design ways to be successful that we can manage directly.”

Luck is never a good strategy, and companies who evaluate their projects’ success and failures are taking the right steps toward admitting what was skill and what was a nice break.

Failure Helps You Execute the Next Project Better

Once you’re ready to move on to the next project, you have the opportunity to take what you experienced and apply it moving forward. This is why many people advocate for post-project reviews even for small tasks and test runs.

“Even if a project is small, there are always things that pop up which will help you learn for larger projects,” writes one account manager at Portent, Inc. “For example, let’s say that the project was delayed because of communication issues. This could lead to a delay of a few days for a small project. But in a massive project, this could delay you by months and more importantly, increase the cost by two-fold.”

In some cases, the project itself was executed properly, but the process of approval and collaboration failed. This is often the case in companies with complex approval processes or agencies that work between account managers and clients.

“A project often has multiple parties interested in its outcome, and groups may even have divergent goals and expectations,” says Mike Trigg, COO at Hightail.

“I once spent weeks working with a designer and copywriter on a website home page redesign, only to have our carefully-crafted work dismantled by the company’s various heads of department demanding changes to meet their individual needs. Our problem was that we failed to establish who owned the project and therefore didn’t deal with potential conflicts and disappointments in advance.”

This is where the real project reviews come it. Delays, setbacks and challenges often aren’t caused by employees lacking the right skills or instructions, but by the creation process itself.

Reviewing flaws in small projects sets you up to create channels of improvement in the big ones.

“If you don’t have a clear focus at the at the earliest stage of the process, you are making things harder on yourself,” says Rosanne Lim, writing for ProjectManagement.com. “Have a meeting, even if it is lengthy, with stakeholders to discuss their expectations on cost, time and product quality.

“Tracking milestones is how you are going to know whether you are meeting expectations. Proper recording and monitoring lets the PM identify where more resources are needed to complete a project on time.”

Treat your projects like a leaky dam. If you find the source of a small leak — perhaps a faulty approval process or miscommunications between client and vendor — then take the necessary steps to patch it up.

That way, you’ll reduce the risk of a small leak breaking down the whole dam when you most need it.

Failure Can Improve Customer Relations

If it’s hard for employees to admit their faults to their managers, then it’s almost impossible for vendors to admit problems to their customers.

“Consider bringing in representatives from the client side to take a look at the lifespan of the project,” says Andrew Lovasz, CEO of Main Path Marketing. “Whether it’s over a conference call or passing along documents from the meeting, it’s always wise to share knowledge of how the project performed. Although this may seem a bit intimidating, it’s entirely useful to help manage the client’s expectations going forward.”

If your team and vendors feel a little intimidated about really sharing their feelings, consider making the process anonymous for all parties.

“We’ve found both internal and external feedback on projects to be more candid when it’s submitted anonymously,” says Brittany Hodak, co-founder of ZinePak. “Now, before every project debrief, we collect anonymous survey responses in Google Forms. This feedback helps us shape our regroup meetings to make sure all problems are being addressed so future projects can run more smoothly.”

It’s entirely possible that people who have ideas for improvement are too intimidated to say anything and don’t want to ruffle feathers. As long as the criticism is constructive and leads to results, there’s no reason to avoid anonymous feedback.

You Reduce the Risk of Failure for Next Time

Many educators are also teaching their students about failure and taking lessons from the business world. Like managers, they’re setting the standards incredibly high to push students so that they learn take feedback and try again.

“But in the next breath, give detailed suggestions on what they can do to improve. And, most important — though so often given short shrift — allow students the time, space and support to make the revisions.”

By making revisions part of the process, students learn early on to keep growing and improving.

As a manager, you can learn from this by letting your team know that no project is perfect — and no project is executed perfectly. There is always room for improvement.

“Failure brings with it important firsthand knowledge,” says R.L. Adams at Wanderlust Worker. “That knowledge can be harnessed in the future to overcome that very failure that inflicted so much pain in the first place.”

Today, you might solve a big problem with communication, which allows you to find smaller problems that can also get fixed tomorrow. As long as your employees are growing and your office is improving, the likelihood of failure — and the sting when it eventually occurs — diminishes.